Final answer:
The term 'service sector' refers to the part of the economy where businesses and individuals provide intangible services rather than physical goods. It is a crucial component of the U.S. economy and includes various industries such as finance, healthcare, and tourism, which significantly influence the GDP.
Step-by-step explanation:
Service sector refers to organizations and individuals involved in delivering service as a primary product. Firms and businesses within the service sector focus on providing intangible goods, such as transportation, distribution, wholesale and retail sales, and various professional services.
Unlike the primary and secondary sectors that deal primarily with the production of physical goods, the tertiary and quaternary sectors are concerned with the production of services which add value to the economy and fulfill consumer needs in different industries such as engineering, finance, restaurants, sports, childcare, and medicine.
The service sector is a significant part of the U.S. economy, comprising more than three-quarters of the U.S. gross domestic product (GDP). The importance of the service sector can also be seen in economic models like the Circular Flow Model, where businesses are responsible for both demanding resources from the Resource Market and supplying the Product Market with goods and services.
Additionally, the service sector contributes to the organic solidarity of an economy, where various specialized tasks are performed by individuals, making everyone interdependent within a complex economic system. In terms of national wealth, certain service activities like tourism can significantly benefit a country's economy, especially when the sector attracts foreign visitors.